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5.Troubled companies

This category contains 252 posts

6 June 2019 (AFR) – Building insolvencies surge as housing turns

(6 June 2019, AFR, p29, Michael Bleby, senior Reporter) ‘Building industry insolvencies have risen to a four-year high in NSW and are approaching historical highs nationally, prompting subcontractors to demand protection of unpaid payments in an industry estimated to leave an unpaid $3 billion-worth of bills each year. Corporate regulator ASIC figures show NSW building … Continue reading

21 March 2019 (TheAge) – Big dry: $500m wiped off Nufarm as drought takes its toll

(21 March 2019, The Age, Business, p22, by Darren Gray) ‘More than $500 million was wiped off the value of the agribusiness Nufarm on Wednesday as it swung to a first half loss, suspended its interim dividend and revealed that its performance had been crunched by severe drought in eastern Australia.’ Read more at TheAge.com.au

15 March 2019 (AFR) – Parly report raises claims of insider trading at Retail Food Group

(15 March 2019, AFR, p17, Carrie LaFrenz and Luke Housego) ‘Retail Food Group has damaged the reputation of the entire franchise industry, according to a final parliamentary inquiry report that recommended the corporate and competition watchdogs and the tax office investigate behaviour including possible insider trading, breaches of market disclosure obligations and tax avoidance. The … Continue reading

14 March 2019 (TheAge) – $20 million missing: Broker’s client money used to cover losses

(14 March 2019, The Age, Business, p26, By Sarah Danckert) ‘One of Australia’s largest brokers, Halifax Investment Management, is set to head into liquidation after administrators discovered that some of the $210 million of client money was used to cover off losses on bad bets on investment products by other clients. Investigations by administrators from … Continue reading

13 March 2019 (AFR) – The final kick in Shoes of Prey collapse for Blue Sky backers

(13 March 2019, AFR, p16, Jonathan Shapiro) ‘Investors in a Blue Sky fund that backed start-up Shoes of Prey are set to lose all their money, including a portion of the $1 million in management fees that were paid five years in advance. On Monday, Blue Sky told investors in its Blue Sky Private Equity … Continue reading

7 March 2019 (AFR) – Glimmer of hope as Myer profit rebounds – Slashes and shuts its way back to profit

(7 March 2019, AFR, p1 and 11, Sue Mitchell) ‘Myer chief executive John King warns revenues will be “lumpy” over the next year but Australia’s largest department store chain can grow earnings nevertheless by cutting costs and abandoning profitless sales. Mr King has given Myer’s long-suffering shareholders a glimmer of hope that the 119-year-old chain … Continue reading

25 Feb 2019 (AFR) – Kraft Heinz shares dive 27 pc and shake confidence across the sector

(25 February 2019, AFR, p19, by Alistair Gray and Leila Abboud) ‘Shares in Kraft Heinz dived 27 per cent on Friday as Wall Street reacted with alarm to a “disastrous” update in which the company took a $US15 billion writedown and disclosed it was the subject of a probe by the Securities and Exchange Commission … Continue reading

20 Feb 2019 (AFR) – SeaLink’s Captain Cook Cruises hits choppier waters

(20 February 2019, AFR, p23, by Simon Evans) ‘The broad economic slowdown has extended to Captain Cook Cruises on Sydney Harbour and in Perth, with operator SeaLink Travel Group saying tighter consumer spending in the domestic market and a softening of some international tourist markets is crimping growth on those tourist-focused vessels.’ Read more at … Continue reading

19 Feb 2019 (AFR) – Bingo downgrades profit 20pc due to apartment building slowdown

(19 February 2019, AFR, p15, by Simon Evans) ‘Investor confidence in waste management group Bingo Industries has been shredded after the company cut its profit forecasts by up to 20 per cent just three months after re-assuring investors at its annual meeting that a downturn in construction wouldn’t hurt its outlook. Bingo shares tumbled by … Continue reading

19 Feb 2019 (TheAge) – Bin baron loses $100m in one day in big dump

(19 February 2019, The Age, p24, by Nick Toscano) ‘… on Monday, the company became something of a share-market dumpster fire. Shares in Bingo Industries fell nearly 50 per cent by the end of the day, wiping $658 million from the company’s market value. ‘ <snipped…> ‘Investors savaged the stock after Mr Tartak told them … Continue reading

13 Feb 2019 (TheAge) – Nearly $60 million in customer money mixed up at collapsed broker

(13 February 2019, The Age, Business, p25, by Sarah Danckert) ‘Administrators picking through the wreckage of one of the country’s largest online broking houses Halifax Investment Services, have found that $57 million in money invested by clients has been mixed up with funds belonging to the company. Halifax collapsed before Christmas, freezing $210 million invested … Continue reading

6 Feb 2019 (TheAge) – Hayne report kicks true reform down the road … again

[COMMENT: Here is a good summary of financial institution disasters in recent years, including the highlighted ones below. But why do they continue to happen, almost cyclically?] (6 February 2019, The Age, p21, by Andrew Linden and Warren Staples) ‘Every 10 to 15 years it’s the same. Since financial deregulation in the 1980s, we’ve had … Continue reading

30 Jan 2019 (AFR) – Tesco to cut thousands of jobs as part of wide-ranging corporate overhaul

(30 January 2019, AFR, p25, by: Josephine Cumbo and Jonathan Eley) ‘London | Tesco plans to slash thousands of jobs as the UK’s largest supermarket group embarks on a shake-up to cut costs in the face of intense competition. Tesco said on Monday that about 9000 positions were at risk as it reviewed in-store fresh food … Continue reading

22 Jan 2019 (AFR) – RemaPak decline illustrates ‘trauma’ for gas-based manufacturers

(22 January 2019, AFR, p6, by Angela Macdonald-Smith) ‘The decline into voluntary administration of polystyrene cup manufacturer RemaPak has revived concerns that whole sectors of industry will be unable to withstand the new reality of higher gas prices on the east coast, with gas-based chemical manufacturers seen most at risk.’ Read more at AFR.com (might … Continue reading

18 Jan 2019 (AFR) – Aged care has been a profitable short for Monash Investors

(18 January 2019, AFR, p19, by Jessica Gardner) ‘Monash Investors principal Simon Shields has warned aged care investors to prepare for a torrid year that will weigh on the share prices of Estia Health, Japara Healthcare and Regis Healthcare as the royal commission kicks into gear. Not that he is worried. Short-selling the sector’s three … Continue reading

17 Jan 2019 (AFR) – ‘We will go broke’: Subcontractors, ATO owed millions in Merhis collapse

(17 January 2019, AFR, p29, by Larry Schlesinger) ‘The collapse of companies tied to Western Sydney developer and builder Merhis Group has cut a path of destruction among subcontractors and suppliers at the same time as the Australian Tax Office chases tens of millions of dollars in unpaid taxes. Amid the scrutiny on apartment construction following … Continue reading

10 Jan 2019 (AFR) – Crabtree & Evelyn shutting up shop in Australia

(10 January 2019, AFR, p15, by Matthew Cranston) ‘Beauty and home products retailer Crabtree & Evelyn is the latest retailer to fall victim to lower discretionary spending by under-pressure households, with restructuring experts KordaMentha appointed to close down the entire Australian network of stores. “We decided to execute the close-down of Crabtree & Evelyn in … Continue reading

9 Jan 2019 (AFR) – UBS economist Arend Kapteyn says global economy slowing more than feared

(9 January 2019, AFR, p19, by Jonathan Shapiro) ‘UBS economist Arend Kapteyn says the global economy has slowed by more than he initially feared as recent data dispells hope that growth has stabilised. “The glimmer of stabalisation we saw in December was a head-fake,” the economist told clients in Shanghai for the UBS Greater China … Continue reading

9 Jan 2019 (AFR) – Kathmandu down… is The Reject Shop next?

(9 January 2019, AFR, p14, by Sarah Thompson and Anthony Macdonald) ‘Earnings downgrades rarely happen in isolation. One in a particular sector will often bring a second, while one at a company will often be followed up with another in the not too distant future. So fund managers are on high alert following Kathmandu’s softer … Continue reading

8 Jan 2019 (AFR) – Sears prepares for possible liquidation as ESL bid fails

[COMMENT: Is this really a good indication of how tough it is in the retail environment, when a very large retail institution closes?] (8 January 2019, AFR, p19, by: Eliza Ronalds-Hannon and Lauren Coleman-Lochner) ‘Sears Holdings is preparing to wind down after chairman Eddie Lampert’s bid to buy several hundred stores out of bankruptcy fell … Continue reading

4 Jan 2019 (AFR) – Why Apple iPhone users are breaking the upgrade cycle

(4 January 2019, AFR, p16, by Natasha Gillezeau) ‘Apple commentator and loyal iPhone user Remy Numa remembers queuing for hours back in 2008 at the Sydney Apple store to buy his first iPhone. But when Apple’s latest round of devices – the iPhone XR, iPhone XS, and iPhone XS Max – hit Australian shelves in … Continue reading

21 Dec 2018 (AFR) – BWX slashes full-year outlook, stock tumbles 47pc

[COMMENT: Note to self… When studying the price charts, and noting a fall in the share price, look for company announcements, and especially an earnings or profit downgrade. If so, it might be time to close an open position.] (21 December 2018, AFR, p19, by Carrie LaFrenz) ‘Just days before Christmas, BWX Limited has revealed … Continue reading

17 Dec 2018 (AFR) – IOOF one step away from forced restructure

(17 December 2018, AFR, p1, by James Frost) ‘IOOF is one step away from a forced restructure after the Australian Prudential Regulation Authority was prompted to perform an emergency downgrade of its risk rating of the company because of fears it posed a threat to its customers and/or the Australian financial system.’ Read more at … Continue reading

12 Dec 2018 (AFR) – Treasury Wines’ painful $4 billion spillage

[COMMENT: Technical analysts (aka chart readers) could have spotted a potential loser here, some months before the share price tanked. They would have trimmed any losses and quite the stock.] (12 December 2018, AFR, p17, by Simon Evans) ‘Old-school investors who believe share sales by directors and top executives are a potential danger signal have … Continue reading

10 Dec 2018 (AFR) – ‘Frank Squared’: Circularity of Quintis deal examined in receivers’ hearings

[COMMENT: This interesting news story brings some great insight into what can sometimes happen behind the scenes with managed funds.] (10 December 2018, AFR, p20, by Vesna Poljak) ‘The Abu Dhabi Investment Council was able to exit $10 million of plantations managed by the sandalwood grower Quintis by virtue of a three-way transaction financed by … Continue reading

10 Dec 2018 (AFR) – AMP class action beauty parade turns ugly

(10 December 2018, AFR, p19, by Misa Han) ‘On May 9, a day before AMP’s annual general meeting, boutique class-action specialist Quinn Emanuel filed the first class action against the wealth giant in the NSW Supreme Court.’ <snipped…> ‘It turns out Quinn Emanuel wasn’t the only law firm working towards a tight deadline. At 10.56 … Continue reading

7 Dec 2018 (TheAge) – Freedom Insurance shares halved on liquidity warning

(7 December 2018, The Age, Business, p28, By John Collett & Sarah Danckert) ‘Investors have wiped out almost half embattled Freedom Insurance Group’s market capitalisation after it warned it may face a liquidity shortfall and admitted it was under investigation by the corporate watchdog for misconduct highlighted by the banking royal commission. The company said … Continue reading

4 Dec 2018 (AFR) – RCR Tomlinson creditor claims forecast at $630m; investors last in the queue

(4 December 2018, AFR, p14, By Jenny Wiggins) ‘RCR Tomlinson’s administrators are likely to be hit with about $630 million in financial claims after the engineering group collapsed but most creditors will only get paid if the company receives “strong” offers for its asset sales, McGrathNicol has warned. Shareholders who hold RCR stock are at … Continue reading

4 Dec 2018 (AFR) – Slowdown hits third of smaller malls as e-commerce bites: Little Guns report

(4 December 2018, AFR, p31, by Nick Lenaghan) ‘One-third of the country’s sub-regional shopping centres failed to increase their annual turnover in the past year as the retail sector faces pressure from disruption and a cyclical slowdown. Sub-regional malls, defined as those with between 20,000 square metres and 50,000sq m in retail space, are often … Continue reading

4 Dec 2018 (AFR) – Roger David retailing chain leaves a $30m hole for landlords

(4 December 2018, AFR, p17, By Simon Evans) ‘Thirteen shopping centre landlords have been left with a combined $30 million problem after the demise of menswear retailer Roger David. Structural shifts in the sector are weakening the position of shopping centre and shop owners as the percentage of online shopping transactions rises and $2 billion-plus … Continue reading

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